Its fairly obvious to see where bitcoin is going. Those that spent tens of thousands of dollars will be able to mine for the longest while remaining profitable. The smaller you are the quicker you stop mining and sell off your hardware. This summer will see a majority of people stop mining because its unprofitable. Difficulty will not go down with these people leaving, to think that is a pipe dream. Mining will be concentrated among those who spent the most. The price of a bitcoin will rise and fall and will remain extremely volatile. And this is with no catastrophic events occurring. This is the optimists view of bitcoin.
I understand what you are getting at, but I disagree. Just because you have a larger operation doesn't mean you will mine for longer. Given the equivalent hardware, once BTC earned from mining becomes equal to the electricity costs of mining, the guy with 10x more machines just loses 10x more money as the guy with 1x machine. The people who will last the longest are those with the lowest electricity costs. Efficiency of hardware will play a small factor (but not that large since there isn't a lot of variance in power efficiency). The bigger factor will the $/kwh paid for electricity. Basically one's geographic location will for the most part determine how long he/she can continue mining and still make a profit.
There will be a few people who get "free" electricity because they run their systems at work, in a dorm or whatever, but I think they will be outweighed by the tons of people who drop out of mining because their electricity costs make it unprofitable. Europeans I think will be the first to drop off, then big city dwellers in the US. Difficulty may dip for a while but it will eventually start growing again, at a slower rate, as some people jump back in, and those with cheaper electricity scale out with the new-found breathing room.
No, I am not talking down to the point where we are dealing with electricity costs. No one is going to run their machines for a week to earn a single bitcoin, or at least smart people won't. Running the computers full bore for a week to earn 15-20 USD is stupid, but it would easily pay for the electricity costs. By mid july, my 655Mhash/s will be earning me about 1.5BTC a week. Why would I keep them running for that? At the same time, mid july, a guy with 10Ghash/s will still be earning 23.5 bitcoins a week. He obviously will keep them running for 350-470 USD a week. Its a matter of when it just becomes stupid to continue mining. If the price of bitcoins rises considerably, then it will delay when it becomes stupid for me to quit mining, but it will also delay even longer the time that people with thousands and thousands invested will mine for. They will always stay in the mining game longer than small fish like me because their payout will always me much more massive than me.
